Family can be the most wonderful thing in our lives while also being the most complicated. And, when it comes to planning for the future, a complex family structure will bring with it issues and considerations that must be taken into account. This is especially true when you’re estate planning for a blended family since this typically requires more modifications and detailed documentation than for a “traditional” family.
If you’d like more information about why estate planning is important in blended families and are in the Westerville, Ohio, area, call The Law Office of David G. Bale today. David Bale is also able to help clients throughout Delaware County and Franklin County, as well as Worthington and New Albany.
Why Estate Planning Is Important in Blended Families
There are several estate planning challenges in blended families that should be looked at individually to ensure your long-term plans accurately reflect your wishes and family priorities:
- Ensure everyone is accounted for: Blended families tend to get quite large because each spouse may have children from past relationships as well as any new children from the current relationship. Depending on their level of needs and the assets they’re in line to receive from other family members, your estate plan can ensure that all of your children’s needs have been considered and they are set up for a smooth transition when you pass away.
- Address past divorces and new marriages: Many people will name their spouse as their beneficiary on financial and retirement accounts as well as life insurance policies. When you remarry, it’s essential to revisit these plans to make sure your beneficiary is updated to your new spouse.
- Include prenuptial agreement provisions: When people enter into a second or third marriage, they may choose to use a prenuptial agreement since estates and wealth can get infinitely more complicated. These prenups should be carefully reviewed by your estate planning attorney to make sure their provisions are included in your plan.
- Help avoid probate or unnecessary taxes: If you choose to put assets in a trust, this can help to avoid the costly and lengthy process of probate and may even reduce your heir’s tax burden.
Estate Planning Challenges for a Blended Family
Any time you begin estate planning, you’ll encounter challenges because you’ll be forced to decide which of your assets should be given away to certain loved ones. In a blended family, this can be even more complicated because you’ll now likely have two or more sets of children to think about. For example, if you remarry and both you and your new spouse have children from previous relationships and then go on to have another child together, you’ll have to decide how to include all of them when allocating assets. This often involves updating a will to account for the new spouse and stepchildren.
The older children may also be receiving an inheritance from their other parent, and this may mean that their relative share of your estate is reduced. However, the individual needs of one child may trump the others and lead you to leave more for one child than you would another. You’ll also need to choose an executor who will treat both sides of your family with the same care and respect, and above all, honor your wishes.
Options for the Estate Plan
Most people start their estate plan with a will, and this is a good foundation for most families. However, a will can be limited and will likely have to go through the legal process of probate. Because of this, you may wish to make use of a trust.
A trust works like a will in that you can allocate certain assets to go to your named beneficiaries; however, with a trust, you actually transfer ownership of your assets into the name of a trustee while you’re still living. The trustee is then responsible for transferring the assets to your heirs after you pass, and this can be done immediately, without waiting for any court intervention.
Trusts also offer more flexibility with how assets are allocated. For example, you can set up a trust in the name of multiple family members and stipulate how they will receive their inheritance. For one child, you may choose to hold on to the asset until they reach a certain age. For another, you may wish to convert the asset into a life insurance policy and have them named as the beneficiary. You may even wish to use a marital trust, which can let you leave assets to your surviving spouse while also attending to your other heirs.
Common Mistakes in Estate Planning for Blended Families
When you work with an experienced attorney, they’ll help you avoid common mistakes that are made in estate planning for blended families. These can include:
- Not updating the beneficiaries on financial documents like pensions, insurance policies, or investment portfolios
- Thinking that you have to treat all your heirs equally
- Presuming you can complete your estate plan without the help of a lawyer
- Not updating your estate plan when you experience major changes in your life
Protect What Matters Most
If you’re in the Westerville, Ohio, area and you’d like to sit down with an attorney to discuss your options for estate planning for a blended family, contact The Law Office of David G. Bale today.